How quickly the market can change! Just two days after finishinga bidweek that saw indexes climb 30 cents or more, traders tookcash prices down Thursday to levels looking much more like Augustindexes than those of September. It was a rare point that managedto avoid a double-digit decline, and some registered drops of 20cents or more.

Sources expressed shock at the Nymex free-fall in which Octoberfutures plunged more than a quarter. That pretty well definedThursday’s market, a producer said; “cash was shackled to the heavyanchor that was the screen.” The weakness in both cash and futureswas enhanced by Wednesday afternoon’s large storage injectionreport, which had come too late to affect that day’s trading,another source said.

More than one buyer interpreted the plunge as a “correction” forwhat they considered overinflated September indexes. A marketersaid prices also were adjusting for the lack of “storm hype” thathad dominated the last half of August.

Most sources believe there is room for further price drops goinginto the long holiday weekend, but they also expect some recoveryto begin after Labor Day. However, a Southwest producer said itlooks like “a long, hard road” back to September index levels, “andI don’t think we’re going to get back there unless a really badhurricane comes along.”

An aggregator told Daily GPI he was “holding my breath as best Ican until tomorrow [Friday] and doing as little business aspossible.” He counted himself among those anticipating apost-holiday rebound. “This plunge is just happening because manytraders are trying to finish swing business quickly and enjoy along weekend,” he said. “The drop looks more dramatic than themarket really is.”

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